Regarding U.S. President Donald Trump's remarks on possibly adding stronger sanctions on the North, including a naval blockade, the commentarysaidWashington is "raging with lunacy for a clash amid the the continued easing of the atmosphere on the peninsula".

The drills will take place next month, a South Korean presidential security adviser said according to the Yonhap news agency.

Pyongyang also said on Saturday that it is willing to have talks with the U.S., but that it rejects Washington's demands that it must first demonstrate willingness to denuclearize.

"If Washington continues to hang onto its sanctions and pushes ahead with the joint military drills, we will take our own method of response to rein in the USA, which will take full responsibility for all ramifications", it said.

"It is the consistent and principled position of the DPRK to resolve issues in a diplomatic and peaceful way through dialogue and negotiation", the spokesperson said.

North Korea has said it would not beg for talks with Washington, its official KCNA news agency reported on Saturday.

The Korean Central News Agency quoted the North's representative to the United Nations office in Geneva as telling the plenary meeting of the United Nations disarmament conference on Tuesday that it is a legitimate right of a sovereign state to take measures to increase its national defense capability for coping with outside threats. The sanctions also target 28 cargo ships, including those from North Korea, China and Singapore.

North Korea is formally known as the Democratic People's Republic of Korea.

The North sent delegations to attend the opening and closing ceremonies of the Pyeongchang Olympics and they met with South Korean President Moon Jae In.

The United States is also concerned that there could be a nuclear arms race in the region if North Korea becomes a full nuclear power, as Japan may also become one.

According to the officials, it's feared that if North Korea achieves full nuclear power, it could share its technology with Iran, Pakistan, Libya or other nations, and that would be more risky to the United States than conventional military action, even if there are civilian and military casualties.

It further said the military drills between the US and South Korea would harm reconciliation efforts and the North shall be "forced" to counter the US. "Phase two may be a very rough thing, may be very, very unfortunate for the world". "If Pyongyang were able to cash out into physical currency, it would be relatively easy for them to move that currency back into North Korea and to buy things with the physical currency", Moriuchi said.

The White House said any talks with North Korea must lead to an end of its nuclear programme.

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